NZ stocks: Market subdued, Air NZ under travel agent pressure

12.00pm

The sharemarket continued to retrace its steps, as Air NZ came under pressure and a few profit-takers moved in.

Just after 11am the NZSE-40 was down 8.31 points to 2119.90 on turnover worth $21 million. Yesterday the index eased 11 points on a heavy $132 million turnover, after it hit 2150.31 last Friday, its highest level since August 2000.

"It's just a down day," said broker Greg Arnott of DF Mainland.

"The NZSE-40's had a pretty good run in the last couple of weeks ... Ever since the first week in May it's put on almost 100 points, it's a pretty sterling effort really."

This morning the focus was heavily on Air NZ which was down 6c to 65 on 2.7 million shares. Mr Arnott said the main concern appeared to be that Air NZ would lose custom as disgruntled travel agents condemn the airline's decision to cancel their booking fees for domestic flights.

"That sentiment had been echoed globally as well," said Mr Arnott.

"The market's following it very closely this morning."

The Dominion also reported this morning that Qantas was offering 35c a share for a 25 per cent stake in Air NZ.

Also grabbing some limelight was Pacific Retail Group, up 19c to 297 as a takeover bid by Cullen Investment's continues. Brokers suggested lack of liquidity in the stock was pushing the price up.

More than half the total turnover belonged to Telecom, which nudged up 3c to 511 on $12.1 million worth of shares. Media speculated yesterday that Verizon, Telecom's cornerstone shareholder, was about to exit the stock to repay debt.

Carter Holt Harvey fell 3c to 200, and Fletcher Forest head stocks fell one cent to 25. Dental concern Software of Excellence lost 12c to 250 after announcing an improved full year loss of $191,000 with no dividend.

Contact Energy bucked the trend, up 3c to 403, as did cyclical stock Fletcher Building, up 3c to 290. Retailer Briscoes was up 4c to 219 after news that the company was looking at three or four new business opportunities.

So far there have been 23 rises and 38 falls on 101 stocks traded.

Elsewhere there was fairly flat trading on Wall St and London markets were closed for the Queen's Birthday long weekend.

The Dow average was down 21.95 points, or 0.23 per cent, at 9687.84, as the roll call of companies under investigation for alleged trading abuses grew. The broader Standard and Poor's 500 Index was up 0.01 point at 1040.69. However, technology investors moved to snap up bargains, pushing the Nasdaq Composite Index up 15.56 points, or 1 per cent, at 1578.12.

- NZPA